The First Order Condition from the Individual's Utility Maximization Problem $\frac { w } { c } = 1 / 2 \frac { 1 } { \bar { L } }$

question 40

Multiple Choice

The first order condition from the individual's utility maximization problem used to determine the labor supply curve is:

• A) \(\frac { w } { c } = 1 / 2 \frac { 1 } { \bar { L } }\)
• B) \(c _ { \text {today } } = c _ { \text {future } } \cdot \frac { L } { \bar { \ell } }\)
• C) \(\frac { c _ { \text {future } } } { c _ { \text {soday } } } = \beta ( 1 + R )\)
• D) \(L = \frac { \bar { \ell } w } { c }\)
• E) None of these answers are correct.

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Definitions:

Merchandise

Goods that are bought and sold in the course of business, often referred to in the context of retail or wholesale trading.

Lower of Cost or Market

An accounting principle stating that inventory should be recorded at either its historical cost or its market value, whichever is lower.

Inventory

Items such as raw materials, work-in-progress, and finished goods that a company holds for the purpose of sale in the ordinary course of business.

Inventory Management

The systematic approach to ordering, storing, and using a company's inventory, including raw materials, components, and finished products.